Second Chance Banking and Bad Credit Scores

There is unfortunate that many Americans are unable to get a bank account. There are so many reasons as to why you can’t get a bank account, but that doesn’t mean it is impossible for you.

Nowadays, there are many methods you can still use a bank despite a messy banking history. To learn more, keep on reading this article about second chance banking, credit scores, and more.


Why it is Hard for People to Get a Bank Account?

There are numerous reasons why a person may be unable to get a traditional bank account. Typically, if you had a very unfortunate banking history, there is a high chance you would be turned down for a bank account. This is especially true if you are trying to apply for a checking account.

One common issue that may cause people not being able to get a bank account is because they had too many fees that weren’t paid for for a past account, which leads to its closure.


Another reason is that you have a history of making bad checks, especially to merchants. This will surely be reported and placed in your banking history.

Additionally, if you have ever committed fraud  and were caught by police or bank, there is a high chance you would be denied of a bank account. This can all be accessed through your bank financial history from verification services, which is usually done by financial companies.


Along with that, if you had a habit of overdrafting your bank account, it could be closed. This also gets written in your banking history which can make people reject you for a bank account. Overdrafting means that you are withdrawing money from your bank account that you don’t actually have.

This typically happens to people who treat their bank accounts as if they are credit cards. A bank typically denies the person with this type of history from opening a bank account because they’ll be under the impression that they are irresponsible.


You can get denied for writing too many bad checks. This would also mean that if you have created too many bounced checks, financial institutions may not allow you to make an account. This issue may make you look like you do not know how to manage your money or a bank account, which of course many banks would frown upon.

Therefore if they were to allow you to create a new one, they might think that you will just start creating bounced checks again.


Your Credit Score

Credit scores can play a big part when you try to open an account. Besides checking your bank records from the past, they might also ask credit unions for your credit report or do a credit check on you. Your credit report will reveal whether or not you had a messy financial past.

This will include things such as fraud, bankruptcy, etc. These are all things that will surely be listed on your credit report which the bank will take a look at before approving you for a bank account.


How your credit score affects your ability to get a bank account varies. For example, you can get a lower credit score because it was reported that you wrote a check that was worth more than what you had in your bank account.

Just keep in mind that it is always a good idea to check your credit report before applying to open an account, because they might turn you down and you may not know why.

What Are My Options


Even though it may seem bleak if you get denied for a bank account, there are still many ways you can open one. You should look over your options carefully. To help you out, let us begin with second chance banking.

It is a popular method that many people use if they are denied a bank account because of financial issues or past problems. You can find second chance banking options from some banks, as there are still banks around that will still be willing to help you despite your financial past.


One of the first things that you should do is to make sure that the bank that you are trying to open a second chance banking account with is actually legitimate. You want to make sure that the bank is reputable and trustworthy before giving them your personal information and hold your money. You should make sure that the bank or credit union is insured by the state to make sure that you won’t fall into a scam.


Typically, second chance banking have a lot of similarities with a regular bank account, however you will have restricted access to it for a certain period of time. That period of time is typically referred to as the probation period.

You might notice that there are higher fees for a second chance bank account along with some other limitations that you may not have with a traditional bank account. For instance, you may have the bank account but you will not be given a debit card for it.


While we mentioned that there are higher fees in second chance bank accounts, you may have other fees that you will have to pay for as well. For instance, many banks will require you to pay a fee every month to keep the account open.

That is something that you have to keep in mind when you open a bank account. You want to make sure that you have that money to spare each month. Even though it may not be a large amount you will still want to make sure that you can pay for it.

You should keep in mind that not everyone will require monthly payments, but it is something to inquire so that you are aware. Typically the monthly fees are low.


You will also be asked for more requirements than what a regular bank account would need. They just need extra verification to make sure that you are responsible and qualified enough to open a bank account, even if it is for second chance banking.

You may have to set up direct deposit. They may even ask you to attend a class for money management to make sure that you won’t have any financial mistakes with the second chance bank account.


Another big benefit that you can get from second chance banking is that you can make your banking history better. Of course, you will still have to make sure that you are adhering to the terms of the bank. That way, you will be able to build up your banking history so in the future you could try to open a regular bank account.

However keep in mind that this only helps your banking history, therefore it will not rebuild your credit score if it is low. You can refer to the credit score tips later on in this article if you want to build your credit score.


However keep in mind that not all limitations are involved in every second chance banking option that you see. For instance, you may get some debit card access depending on the bank. Many of them may have no minimum balance required to be kept in your bank account each month, unless stated earlier a low monthly fee would be required. If there is a monthly fee involved, it can’t be waived and it can be up to $15-20 a month.


You may even get online bill payment access and may even be allowed to write checks. Keep in mind that this will still depend on the bank. There are also varying daily limits in the second chance banking account, you may be given either monthly or daily maximum transaction amounts per withdrawal.

The withdrawal limit could be frustrating to some people, especially since it varies on what bank you have chosen. You can be limited to $100 a day, which might be fine for day-to-day things. But for emergencies or large bill payments, it could be frustrating.


Rebuilding Your Credit Score

If you aren’t too sure about opening up a second chance bank account, you can try to rebuild your credit score to be able to apply and get a traditional bank account. Having a better credit score despite having poor banking history may give you a slight advantage when applying for a traditional bank account.

Keep in mind that you may want to get a second chance bank account why rebuilding your credit score. That way, you would be raising your credit score while getting a better banking history.


However, you have to remember that building your credit score is not an easy or quick feat. If you really want to get a better credit score, you will have to implement some changes in your life. You will have to follow good financial habits to raise your credit score.

You may not notice a change in your credit score for months or even a year, but if you keep on working on what you are doing, your effort will surely pay off in a matter of time.


One popular way for a person to build their credit score and have a bank account is getting a secured credit card. Keep in mind that a credit card may not have some of the good features of a second chance bank account, so if ever you may want to get both.

A secured credit card can be easily acquired by people with bad credit scores. This is a convenient way to have a credit card and raise your credit score at the same time.


However, you should not be reckless while using the secured credit card, especially if your goal is to improve your credit score. A secured credit card requires it to be linked to a savings account that already have a certain sum of money to cover the amount that would have to be taken out for the payments of the credit card each month.

Otherwise, your secured credit card would be cut off and you would end up damaging your credit score, which is the opposite of what your goal is. Make sure that you have enough money in your bank account each month to make sure you start building a better payment history to improve your credit score.


Of course, the best way to make sure that your credit score gets better is by making sure that you are changing your financial habits. First off, you would want to start by making sure that all of your bills are being paid for on time.

Paying your bills late would make your credit score get really low because of a poor payment history. These include your home bills, credit card bills, so make sure that you don’t miss a date.


Additionally, you will want to clear any debt that you have, because that will surely affect your credit score. Try to target things such as your credit card balances (if you have any) and keep them as low as possible. Having any unwanted debt lingering will make your credit score get really low and make it harder for you to get a checking account.


It is also crucial that you make sure that your credit report is accurate and correct. There are times where a credit report can have errors, which could reflect badly on you. While it may not have a big difference on your overall score, you don’t want to have something that isn’t true on your credit report to be seen. Get a copy of your credit report and look into it to see if there’s any mistakes.


If you aren’t too familiar about what could be wrong in a credit report or don’t really know how to fix the mistakes, you can ask a credit repair agency to help you. While it is fairly easy to fix an error on your credit report on your own, getting the services of a credit repair agency to help you can be very beneficial, especially if there are more than three errors on your report.

They will be the ones to file a dispute for you at the credit bureau once they found the errors and fight to have them removed. Typically, it takes about a month or up to 45 days to have them be removed.

Be aware that they do not promise to drastically improve your credit score. Credit repair agencies only promise to make sure that your credit reports are as accurate as possible. If there were any changes that were to happen, it would be minor and only be seen after a few months. However, getting rid of those errors is still crucial to make sure there isn’t anything muddying up your report.


Other Bank Accounts

You could try to open a savings account instead of a checking account if you aren’t sure about second chance banking. Typically, this will allow you to have a bank account while building a good relationship with the bank or financial institution that you have an account in.

You have to be aware that when you do this method, you will have to pay whatever outstanding debt you may have from the bank or follow any of their given terms. They may even ask you to attend a workshop for financial management before you open an account to make sure that you can manage your money, like what you would have to do if you opened a second chance bank account.


You could also opt to get a prepaid card as many people are since it has been growing in popularity. They have many similarities to a checking account and may even be used for automatic paycheck deposits. However, they used to be very costly when it comes to the fees, but lately they have been becoming more affordable.

Keep in mind though that you ought to do thorough research regarding prepaid cards to make sure that you are getting the best one possible. You should also aim for a prepaid card that will suit your everyday needs such as online bill payments or for payments in a gas station.


A prepaid debit card can function in many ways. For instance, you can simply use it as a savings account. It will also have the same functions as a debit card, but remember that will depend on what is offered to you by the bank that you chose.

Keep in mind the fee schedule because you can get charged for things such as checking what your balance is, depositing money into the bank account, and withdrawals. So you want to make sure you have the right amount of money in your bank account by that time.


You may also look at banks that offer alternative checking accounts if you aren’t sure about your options yet. Typically there are many features that can be accessed through alternative checking accounts. They also tend to offer lower fees which is always a good bonus.

Most of them will let you write checks, pay for bills online, and create direct deposits. It is always good to inquire first from whoever you are applying to to know if you will have those options.


We strongly urge you to do research on the bank or type of alternative checking account you are getting. You never know when you would be falling into a scam. If the deal seems too good to be true, you better check around.


Just because you can’t get a traditional bank account doesn’t mean you are out of options. There are ways that you can have a bank account or create a better financial and credit history. To learn more about second chance banking and credit scores, check out


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